If Congress doesn’t pass an increase to the statutory debt ceiling, does the White House have a Plan B?  So far, the indications are not encouraging.  Treasury Secretary Tim Geithner says that Plan A is to get a debt ceiling increase, and Plan B is … to get a debt ceiling increase.  With Americans consistently opposed to raising Washington’s credit card limit, 22 Republican Senators have sent a letter to the White House demanding a plan with a significantly lower spending cap:

“We believe it is irresponsible to ignore the broken political system and the very real possibility that the debt ceiling might not be raised in time.  And we believe it is irresponsible not to develop robust contingency plans now – just in case…

“We are calling on your Administration to immediately begin working with budget experts in Congress to allocate spending within a $2.6 trillion Debt Ceiling Budget.  All agency heads should then be instructed to develop plans to make sure essential services would be funded on a priority basis.

“Taking responsible action now will avert a crisis in the future.”

The Obama administration predicts that the federal government will receive $2.6 trillion in revenue next fiscal year, which is why Senator Ron Johnson and the others are demanding a budget capped at that level.  That may be a little on the optimistic side.  Those revenue numbers were based on very sunny assumptions about economic growth in the 4-5% GDP range.  Not only have we not come close to that goal in at least six quarters, we’re now moving in the other direction.  This Plan B might even need a Plan C.

Johnson’s demand also would force the White House to start planning for serious entitlement reform.  Discretionary spending was only one-third of the first FY2012 budget proposed by Obama, which got exactly zero votes in the Senate yesterday.  Mandatory spending would eat up $2.5 trillion of the $2.6 trillion cap, including spending on interest on existing debt as well as entitlement programs.  That would leave a bare $100 billion for national defense and security as well as everything else for which the government spends money.  That’s very obviously unacceptable to everyone, as well as unrealistic — so the only way to avoid wiping out nearly everything else in the federal government will be to immediately restructure entitlements to gain the necessary cost reductions to fit spending within revenue.

The White House won’t take this seriously, of course, unless Congress really does fail to pass a debt-ceiling increase.  At that point, everyone would be forced to take the issue of mandatory spending and its relation to deficits and debt seriously, which is the entire point of this demand.  Why not get started now, rather than wait for the crisis to hit?